Refer to the graph shown below, which illustrates a third-party payer market for diabetes screenings (tests). Suppose that the co-payment is $5 per screening. What happens to total expenditures in the diabetes screening market if a $5 co-pay is established compared to a market where there is no third-party? $20 Supply $15 $10 Demand 25 50 75 Quantity 100 Price %24

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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Refer to the graph shown below, which illustrates a third-party payer market for diabetes screenings
(tests). Suppose that the co-payment is $5 per screening. What happens to total expenditures in the
diabetes screening market if a $5 co-pay is established compared to a market where there is no
third-party?
$20
Supply
$15
$10
Demand
25
50
75
100
Quantity
Price
%24
Transcribed Image Text:Refer to the graph shown below, which illustrates a third-party payer market for diabetes screenings (tests). Suppose that the co-payment is $5 per screening. What happens to total expenditures in the diabetes screening market if a $5 co-pay is established compared to a market where there is no third-party? $20 Supply $15 $10 Demand 25 50 75 100 Quantity Price %24
Expenditures increase by $625
Expenditures decline by $500
Expenditures fall to $375
Expenditures increase by $1,125.
Transcribed Image Text:Expenditures increase by $625 Expenditures decline by $500 Expenditures fall to $375 Expenditures increase by $1,125.
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